Belying apprehensions over a likely fall in revenue mop-up owing to slowdown, indirect tax collections went up by 16.1 per cent to Rs.2.86 lakh crore in April-December this fiscal as compared to Rs.2.46 lakh crore garnered during the same period of 2010-11.

With a rise in service tax mop-up, the total indirect tax collections, which also include customs duty and Central excise, stood pegged at about 72.7 per cent of the budget estimates during the first three quarters of 2011-12.

Releasing the tax collection data for the April-December period at a press briefing here, Central Board of Excise and Customs (CBEC) Chairman S. K. Goel said: “We hope we will be able to meet the budget estimates of Rs. 3.93 lakh crore [from indirect taxes] this fiscal.” The rise in indirect tax collections has been despite the Rs.36,000-crore foregone as revenue owing to the cut in customs and excise duties on petroleum products earlier during the current fiscal. The duty cuts were effected in June, 2011, to lessen the burden on consumers following the hike in prices of diesel, kerosene and domestic cooking gas (LPG). During December, 2011, alone, the overall tax collection went up by 15.9 per cent to Rs.34,819 crore from Rs.30,054 crore in the same month a year ago. The turnaround was markedly promising, as revenue mop-up had dipped by 8.7 per cent in September and by 6.5 per cent in November after showing some growth in October. “December has given a positive news, particularly on the Central excise front, as the collection increased by 9.7 per cent to Rs.12,546 crore [year-on-year]),” Mr. Goel said.

Robust service tax collections

In particular, service tax collection continued to witness a robust growth with an increase of 48.6 per cent to Rs.9,665 crore in December this fiscal as compared to December 2010.

The prospect of mopping up more revenue through service tax remains high as the debt-ridden Kingfisher Airlines, along with Air India, owe a total of over Rs.360 crore towards service tax dues. As per the CBEC data, customs duty collection increased to Rs.12,608 crore in December, which is 4.1 per cent higher as compared to the Rs.12,109 crore mopped up in December 2010. During April-December, the total mop-up through customs duty stood at Rs.1.13 lakh crore, up 13.8 per cent on a year-on-year basis.

As for the other two tax components, while excise collection in December was pegged at Rs.12,546 crore and at Rs.1.05 lakh crore during the April-December period this fiscal, service tax mop-up stood at Rs.9,665 crore and Rs.67,706 crore, respectively, during the same periods.

Explaining the reason for the rise in excise collections in December, Mr. Goel said that while small businesses had started paying the duty, businesses which had exhausted their CENVAT credit were now paying the tax in cash. As for service tax, the extension of date to file service tax to January 6 also helped in higher collection while indicating that the deadline for service tax might be further extended.

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